Day Traders Diary

4/29/22

The major averages fell sharply int the close to notch the worst month since 2008 for the Nasdaq index  as Amazon became the latest victim in the technology-led sell-off. The tech-heavy Nasdaq Composite fell 4.2% or 536 points to 12,334. The index closed at a new low for the year. The S&P 500 retreated 155 points or 3.6% to 4,131. The Dow Jones Industrial Average shed 939 points, or 2.77% to 32,977.

Stocks were set to close out a dismal month as investors have contended with a slew of headwinds, from the Federal Reserve's monetary tightening, rising rates, persistent inflation, Covid case spikes in China and the ongoing war in Ukraine.

The Nasdaq fell 13.3% in April, its worst monthly performance since October 2008 in the throngs of the financial crisis. The S&P 500 is down more than 7%, its worst month since March 2020 at the onset of the Covid pandemic. The Dow is off by nearly 4% for the month.

Technology stocks have been the epicenter of the April sell-off as high interest rates hurt valuations, and supply chain issues stemming from Covid and the war in Ukraine disrupt business.

Amazon on Friday sunk about 14% — its biggest drop since 2006 — after the e-commerce giant reported a surprise loss and issued weak revenue guidance for the second quarter.

The Nasdaq Composite sits in bear market territory, roughy 24% below its intraday high. The S&P 500 is off its record by more than 14% and the Dow is nearly 11% lower.

Friday wraps up one of the busiest weeks for the first-quarter earnings season and a particularly intense one for tech companies, which have driven investor sentiment throughout the week.

Apple shares fell more than 3% after management said supply chain constraints could hinder fiscal third-quarter revenue.

Intel also reported earnings Thursday evening. The stock fell 6.7% after the company issued weak guidance for its fiscal second quarter.

About 80% of S&P 500 companies have beat quarterly earnings expectations, with roughly half of the index's members having reported results so far, according to FactSet.

A hot inflation reading Friday underscored the difficult environment. The core personal consumption expenditures price index — the Fed's preferred inflation gauge — rose 5.2% from a year ago.

Next week, investors are awaiting the Fed's policy meeting, the April jobs report and a flurry of corporate earnings from the likes of Pfizer, Starbucks, Uber and more.